I don't know where to Start - Pension

lornz23

Hi,

I am wondering if anyone can point me in the right direction with any points or tips on where to start. I currently have no pension and I don't really want to get tangled in a work one as I have moved jobs a lot to further my career so would like a pension outside of this. The problem is I just don't know where to start! I know you need to be careful as I don't want to lose it all just as I retire etc so does anyone have a good place that I can start looking at where to go?

Thanks in advance

dunstonh

I currently have no pension and I don't really want to get tangled in a work one as I have moved jobs a lot to further my career so would like a pension outside of this.

If the employer makes contributions to the pension then you join the works one. Even if you dont want it for the weak reason you have given. It is weak because if you leave you can transfer it to the next one and wouldn't have given up free money.

I know you need to be careful as I don't want to lose it all just as I retire etc

It is actually very hard to lose all of it. You would have to make some pretty bad decisions for that to happen.

so does anyone have a good place that I can start looking at where to go?

Find out what the employer offers first. If the employer makes contributions (especially if its a defined benefit scheme) and you opt not to join then this makes you an "opt out" and you will find many pension providers will not offer you a pension due to the high risk of taking on opt outs.

usignuolo

I have a number of these residual pensions and the problem seems to be that there is not enough money in any of the individual funds to pay out a decent pension because I have changed jobs every few years. Wouldn't the OP be in the same position?

dunstonh

usignuolo wrote: »

I have a number of these residual pensions and the problem seems to be that there is not enough money in any of the individual funds to pay out a decent pension because I have changed jobs every few years. Wouldn't the OP be in the same position?

Why not consolidate them then?

jamesd

For any work defined contribution pension it's easy to move the money when you leave. Not so for defined benefit (final salary and similar) types. So if an employer pays money into any defined contribution pension it's almost certain to be a good move to pay money into that pension as a start.

lornz23, best to say more about your work pension. It'll probably be best to at least start out by using that.

middlepuss

If you're thinking of consolidating into a SIPP, this might be useful background reading.

Several suppliers offer SIPPs that are very easy to set up, and it's usually a matter of filling in a couple of forms to get a pension pot (or pots) transferred into a SIPP.

atush

I currently have no pension and I don't really want to get tangled in a work one as I have moved jobs a lot to further my career so would like a pension outside of this. "



"If the employer makes contributions to the pension then you join the works one. Even if you dont want it for the weak reason you have given. It is weak because if you leave you can transfer it to the next one and wouldn't have given up free money.

I agree this is a weak reason and extremely shortsighted. If your company contributes, you are throwing awa 'free money' so is not the best course. By all means, save outside of your company pension as well, in S&S ISas or a presonal pension. But join the work one ASAP.

Loughton_Monkey

To answer the heading directly ["I don't know where to start - Pension"] and literally, I would suggest you don't start from 'here'. Simply to go out and "buy a pension" can be a bit short-sighted.

To do yourself justice, you need to take a step or two backwards and look on it as financial retirement planning. This can (and very often does) eventually involve a pension, but that's only one element of it.

Yes, there is a general rule that says if your company offers a pension to which they themselves will contribute (or better still offer a final salary scheme), then you must simply bite their hand off and take it. But even then, to fail to do any retirement planning is 'sinful'.

In short, it's more about analysing your income, your future income, and your 'lifestyle spending'. What you don't spend is available to 'put away' for retirement. And it is essential to get some sort of handle on what sort of income you need at retirement to maintain the lifestyle you want and can realistically achieve. Usually, this exercise can reveal some fairly stark facts. If you are young enough, there might be time to adjust the 'mix' of your spending/investing to give you a good balance. Simply to go out and buy a pension, at an arbitrary contribution loosely based on what you feel you can afford, often leads to false hopes that the "Retirement Income" box is fully ticked and 'sorted'. Most often, it isn't! This is true even if (by some magic) you happened to fall by accident into the exact correct mix of funds for your particular needs.

Although not the biggest fan of IFA's, I believe they have a valid place in society and can do a good job for the uninitiated. The additional [up front at least] expense may be worth it in your case. But even then, it's always better if you go to one armed with some very clear estimates of what you own, earn, and spend, together with some ideas on what specifically you are trying to achive, and at what sort of age.